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You have financial goals. You would want to save for retirement, your
child’s education, or you have plans to buy a new home or car. To
attain these goals requires more than just earning & saving
regularly. You need to make sound investment decisions—decisions you
can make now.Where should you begin? Stocks, bonds, cash investments.
Large,
small, and international companies. The choices may seem overwhelming,
but they’re really not. Becoming a savvy investor is easier than you
might think: You don’t need to be a financial wizard; you do need to
learn to do just a few things right.
Identify Your Goals and Time Horizon
Before
you can create an investment plan, you need to know what you want to do
with your money and when you’ll need it.Your time horizon is important
because your investments will rise and fall in value throughout the
time you own them. The longer your time frame, the greater your ability
to ride out the ups and downs of the markets.Because you won’t need
your money right away, you can more reasonably select investments whose
values fluctuate in the short term in hopes of earning greater returns
over time.
Choose Your Asset Allocation
Of
the three primary asset classes stocks, bonds, and cash investments
stocks historically have turned in the highest long-term returns,
although with the widest short-term price swings.Before investing, take
time to understand the basics of each asset class. After you understand
and make up your mind in choosing your asset class, Go ahead and invest
in them.
Spread the Risks Around
Financial
experts agree that you should hold a mix of investments from among the
asset classes to help reduce the volatility or fluctuation in market
value of your portfolio. That’s because diversification spreads the
risk around: Subpar performance in one area often can be tempered by
good performance in another. Of course, keep in mind that
diversification does not guarantee
a profit or protect against a loss in a declining market.
Know When to Change Your Mix
Marriage,
birth, an inheritance, the death of a spouse. Life-changing events can
certainly alter your financial situation and give you sound reasons to
change your investment mix. In addition, as time passes, the time
horizon for each of your investment goals shortens: Long-term
goals,become intermediate-term goals and then short-term goals. Over
time, market conditions can also create a need to make a change. For
example, if stocks have been doing particularly well for a long period,
you may find you have a higher percentage of your assets in stocks than
you had planned. You may need to make an adjustment to bring your
portfolio back to your target asset allocation.
Stick To Your Action Plan
Try
to stick to your adopted plan and keep investing regularly. make
investing a regular habit. Dont give up during difficult times.
Challenges are always part of life. Face them and win them. You will
definitely accomplish your financial goals one day.
child’s education, or you have plans to buy a new home or car. To
attain these goals requires more than just earning & saving
regularly. You need to make sound investment decisions—decisions you
can make now.Where should you begin? Stocks, bonds, cash investments.
Large,
small, and international companies. The choices may seem overwhelming,
but they’re really not. Becoming a savvy investor is easier than you
might think: You don’t need to be a financial wizard; you do need to
learn to do just a few things right.
Identify Your Goals and Time Horizon
Before
you can create an investment plan, you need to know what you want to do
with your money and when you’ll need it.Your time horizon is important
because your investments will rise and fall in value throughout the
time you own them. The longer your time frame, the greater your ability
to ride out the ups and downs of the markets.Because you won’t need
your money right away, you can more reasonably select investments whose
values fluctuate in the short term in hopes of earning greater returns
over time.
Choose Your Asset Allocation
Of
the three primary asset classes stocks, bonds, and cash investments
stocks historically have turned in the highest long-term returns,
although with the widest short-term price swings.Before investing, take
time to understand the basics of each asset class. After you understand
and make up your mind in choosing your asset class, Go ahead and invest
in them.
Spread the Risks Around
Financial
experts agree that you should hold a mix of investments from among the
asset classes to help reduce the volatility or fluctuation in market
value of your portfolio. That’s because diversification spreads the
risk around: Subpar performance in one area often can be tempered by
good performance in another. Of course, keep in mind that
diversification does not guarantee
a profit or protect against a loss in a declining market.
Know When to Change Your Mix
Marriage,
birth, an inheritance, the death of a spouse. Life-changing events can
certainly alter your financial situation and give you sound reasons to
change your investment mix. In addition, as time passes, the time
horizon for each of your investment goals shortens: Long-term
goals,become intermediate-term goals and then short-term goals. Over
time, market conditions can also create a need to make a change. For
example, if stocks have been doing particularly well for a long period,
you may find you have a higher percentage of your assets in stocks than
you had planned. You may need to make an adjustment to bring your
portfolio back to your target asset allocation.
Stick To Your Action Plan
Try
to stick to your adopted plan and keep investing regularly. make
investing a regular habit. Dont give up during difficult times.
Challenges are always part of life. Face them and win them. You will
definitely accomplish your financial goals one day.
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